India appears to take a turn for the worse:
The government in Andhra Pradesh state, headed by the coalition’s second-largest member and a leading proponent of India’s technology revolution, was routed by the Congress party, which is also the main opposition on the national stage.
Besides signalling that high-tech prowess had not impressed the millions of rural poor, the result suggested the national election could end in a hung parliament and likely political turmoil as parties searched for new allies.
Votes from the marathon national election will be counted on Thursday but financial markets have already tumbled on fears that India’s crucial economic reforms could be delayed if a weak government comes to power.
Here is the full story.
Let us not forget that India remains a badly messed-up economy. I found the following passage, from William Lewis’s The Power of Productivity, illuminating:
…India has a special problem. It is not clear who owns land in India. Over 90 percent of land titles are unclear…Unclear land titles most affect industries which use a lot of land. These industries are housing construction and retailing. The result is that there is huge demand for the very little land with clear titles. Not surprisingly, the ratio of land costs to per capita income in New Delhi and Bombay is ten times that ratio in the other major cities of Asia…Also not surprisingly, India has very few supermarkets and large-scale single-family housing developments.
But it gets worse: Stamp taxes on land sales run at least ten percent. Furthermore you are often expected to pay real estate taxes, even if you will never be granted title to the actual land. It is said that the money is accepted “without prejudice.” Here is a short article on how to make things better.